[January 05, 2009]

Happy New Year to you all of the YAS group.

I am very glad to address my New Year greeting to you this year as well, despite the global economic storm, said to be a once in a century event.

Ironically, the fact that falling housing prices in the United States triggered turmoil on the financial markets and the rapid downturn of real economies around the world has demonstrated how widely and deeply globalization has spread. This interdependence of global economies is central to the development of our Company's operations in international trade. Nowadays, no country or company can escape the influence of the global tidal wave by simply drawing on their own efforts and resources.

We achieved record consolidated business results in the fiscal year ended March 31, 2008. Although this was the product of your efforts to meeting the "YAS Global Challenge," the medium-term business plan up to the previous fiscal year, the current business environment is not providing us with opportunities to enjoy this success. In the Japanese air freight market, exports are set to register a year-on-year fall for the second consecutive calendar year-the first time ever this has happened-while the recent contraction in imports on a year-on-year basis shows no signs of bottoming out. Overseas, it is unlikely that we will be able to avoid a decline in our cargo movements going forward, given the global recession.

In this very difficult environment, our new three-year mid-term business plan, "YAS Five-Star Project," commenced in April last year. Since the current conditions do not permit any optimism even beyond the next fiscal year, it is needless to say that we need to take a coordinated approach to emergency action to address income and expenditure. However, the goal we have established in this plan, that of becoming a world-class total logistics provider, still stands, along with our three major strategies in sales, organization and basic management. In my opinion, the present situation means it is necessary to actually accelerate and extend these strategies. As I have mentioned over the last few months, we need to place particular emphasis on quality improvement, the development and reinforcement of human resources, and bolstering our integrated logistics business capability, including our ocean transportation operations. As we head into the New Year, I would like to discuss these three challenges again.

With respect to quality improvement, the "YAS Five-Star Project" sets out three quality types: transportation quality, sales quality, and customs clearance quality. In terms of transportation quality, although we are currently in Phase II of this initiative because we have been working on improving operational quality for the past three years, we need to continue to accelerate it by working with you all to step it up to Phases III and IV. With respect to sales quality, in short, it is necesarry to aim at improving overall customer satisfaction. Customs clearance quality aims for accurate information delivery and processing, which requires diligent efforts in not only the customs clearance-related divisions but also in all areas dealing with information. Quality improvement applies to all types of jobs, including improvement of operating efficiency and strengthening cost competitiveness. We need to gain the trust of customers by providing excellent quality services to expand our business. Please ensure that you check each of your tasks carefully from the perspective of "QUALITY."

The development and reinforcement of human resources, the second challenge, is the most important factor for industries like ours and requires unstinting efforts in all areas, as numerous people pointed out during the informal discussion meetings held with me in a number of locations since last fall. The necessary outlays will be made as an investment in our future, and we will vigorously pursue a broad arrange of initiatives going forward. As these are being related to you, yourselves, I would like to see all of you participate.

To bolster the capability of our integrated logistics business, we first need to work on improving our abilities in ocean transportation operations and the logistics business. We have already taken some steps, such as the accumulation of expertise, training and some organizational changes. Not only that, but I also believe that one of our challenges is to study streamlining our organization along with this direction.

While questions have been raised recently about the future of international air transportation as part of the transportation infrastructure, I would like to state emphatically that its significance for international trade will never decline. Rather, it will only increase because of its features such as speed and reliability, and there will come a time when the market and cargo trends turn around in not so long term. Customer needs for logistics in this extremely difficult business environment are becoming more sophisticated and diverse, and this trend will continue. Our corporate philosophy is to contribute to society by meeting customer needs, and the "YAS Five-Star Project," in which we aim to become a total logistics provider, is a means of achieving this goal. Difficult times actually provide us with business opportunities. I believe that we will achieve some significant results in the near future if we operate businesses that match customer needs by focusing on the prevailing conditions and future prospects. Let's get through the present hard times with confidence and dignity.

Finally, I am asking you sincerely to take good care of yourselves and your families. In these current difficult times, I want to ask you again this year to be mindful of your physical and mental wellbeing to ensure that you maintain the best of health, both physically and mentally.

Thank you very much for your attention.

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